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November 30, 2012

HR Fact Friday: It’s No Wonder – Hostess Asking Approval for $1.8M in Exec Bonuses!

Picked this up off the wire . . . this kind of thing gives compensation consulting professionals an upset stomach and begs the question of what kind of severance package was offered to the 18,000 employees that lost their jobs? I have heard of bonuses to to keep executives on board following a merger to support the integration but a retention bonus after declaring bankruptcy and laying off all the staff is a new one on me. Unless I am missing something, weren’t these same executives  responsible for managing the company while it was failing? Nonetheless, and my opinion aside, we will see how the judge rules on this one.

Hostess Brands Inc. plans to ask for a judge’s approval Thursday to give its top executives bonuses totaling up to $1.8 million as part of its wind-down plans.
The maker of Twinkies, Ding Dongs and Ho Hos says the incentive pay is needed to retain the 19 managers during the liquidation process, which could take about a year. Two of those executives would be eligible for additional rewards depending on how efficiently they carry out the liquidation.

Hostess is also seeking final approval for its wind-down, which was approved on an interim basis last week.

The process includes the quick sale of its brands, which also include Wonder Bread. Hostess says it has received a flood of interest in the brands.

The company’s bankruptcy means loss of about 18,000 jobs.


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